Which of the following are characteristics of Sole Proprietorship?

(A) No separate legal entity

(B) Sole beneficiary

(C) Limited finance and skills

(D) Utmost good faith

(E) Implied authority

Choose the correct answer from the options given below :

(A), (B) and (C) Only

Utmost Good faith and Implied authority are the features of Partnership.

Characteristics of sole proprietorship: As 'sole' means single and 'proprietor' means owner, this type of business is one person show exhibiting following features:

1) Individual ownership: This business is exclusively owned by a single person.

2) Individual management and control: "What is to be done, how it is to be done, and when it is to be done‖ - all affairs are managed and controlled by the sole proprietor. Though, competent people can also be employed for efficient management.

3) Individual financing: All investment is made by the proprietor. Though, if required he/she has access to loans and debts to procure funds for business.

4) No separate legal entity: Legally, the proprietor and proprietorship are one and the same business and owner exists together, thus with owner's death, business too dies.

5) Unlimited liability: The proprietor is liable/responsible for all losses arising from business. In case the business assets are insufficient to pay off liabilities, his/her personal property can be called upon to pay his business debts.

6) Sole beneficiary: The sole proprietor alone is entitled to all the profits and losses of business. So he/she puts his/her heart and soul to increase his/her profits.

7) Easy formation and closure: Sole proprietorship is subjected to minimum legal formalities and regulations both at the time of commencing and/or closing.

8) Limited area of operation: This form of business generally has a limited area of operation due to:  limited finance availability and limited managerial abilities.